The US international trade deficit in goods and services increased to $49.4 billion in April from $42.3 billion in March, as exports and imports saw their largest monthly declines in history. It is the latest indicator that economy is struggling during the COVID-19 crisis according to Commerce Department data. The bad news increases if you consider the unemployment crisis.
- The April petroleum surplus ($3.2 billion) was the highest on record. Based on the current definition of the petroleum series which was established in 1978. Click here for more information.
- April exports of automotive vehicles, parts, and engines ($3.8 billion) were the lowest since March 1992 ($3.6 billion). Click here for more information.
- April imports from Canada ($15.0 billion) were the lowest since July 1999 ($14.6 billion).
The unemployment crisis is compounding the economic distress. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, that increase in unemployment benefits and is only in place – thus far – through July 31, 2020. The Congressional Budget Office estimates that extending that increase for six months through January 31, 2021, would have the following effects:
- Roughly five of every six recipients would receive benefits that exceeded the weekly amounts they could expect to earn from work during those six months.
- The amount, on average, that recipients spent on food, housing, and other goods and services would be closer to what they spent when employed than it would be if the increase in unemployment benefits was not extended.
- The nation’s economic output would probably be greater in the second half of 2020 than it would be without the extension of the increase; in calendar year 2021, however, output would be lower than it would be without the extension.
- Employment would probably be lower in the second half of 2020 than it would be if the increase in unemployment benefits was not extended; in calendar year 2021, employment would be lower than it would be without the extension.
CBO says, “The estimated effects on output and employment are the net results of two opposing factors. An extension of the additional benefits would boost the overall demand for goods and services, which would tend to increase output and employment. That extension would also weaken incentives to work as people compared the benefits available during unemployment to their potential earnings, and those weakened incentives would in turn tend to decrease output and employment.”